How to create a trade association

March 16, 2006 4:50 PM

How does one go about creating an trade association?

I'm involved with a startup in a very new industry, and after talking with some of our competitors, there has been considerable interest in creating a trade association to help promote and standardize the industry, as well as to provide a forum for open information exchange. (We're not looking to create a cartel -- we genuinely want to find a way to make this industry thrive for everyone, not simply to pick a few key players and promote them over the others.)

I've tried searching Google for information on how to start a trade association, and came up short. Does anyone have any experience in this area?

Thanks!

posted by oissubke to Work & Money (3 answers total)

I'm not at all being snarky, but you just have to do it. IF it makes sense to do.

Now, you don't say what industry you're in, but a first step is to continue having conversations with other companies in the industry and working toward a consensus on what you're trying to accomplish and what the value is for all concerned. Typically these things require seed money and often get it from a couple of companies who have very clear economic interest in generating buzz, standards, market awareness, etc for some aspect of their business.

See for example: Mobile DTV Alliance, which had deep pockets behind it (Intel, Nokia). A more grassroots effort in my industry (mobile if you hadn't guessed) is the Mobile Marketing Association which was really bootstrapped and went from a small and kind of peripheral group to one that's now well respected, has a large membership including companies that you've actually heard of. This success of this second effort was due to some startups and a couple of established companies dedicating time and resources to build consensus, establish a mission for the org, etc etc.

Bottom line: It's not a trivial process.

A key thing you need to figure out is what the benefit of having the association will be and is it worth the diversion of resouces from (what I assume) is a lean startup to deal with all the coordination hassles that are involved in getting something like this off the ground. Fundamentally, what's the goal and (from a business POV) can you put a dollar value on it? If it just seems like a good idea 'cause there isn't an organization to belong to, it might not be worth pursuing.

Maybe you could share some more details?
posted by donovan at 5:27 PM on March 16, 2006

My late father did it, and he said that they were stalled at basically at the same stage as you. He said (if I remember correctly) that opening a bank account and collecting the first round of (modest) dues propelled the nascent group toward scheduling the first meeting (the hard part), and then once they had done it and enjoyed and realized the benefit of the association that was enough momentum to keep it going and building. Not too much later on they were able to set aside enough money from dues to put together a modest scholarship grant for graduates in South Central Los Angeles who wanted to go to college to study energy engineering.
posted by planetkyoto at 7:58 PM on March 16, 2006

Trade associations need to be very very careful about running afoul of anti-trust laws. Talking to competitors and setting standards can easily be interpreted as being "anticompetitive." Even things like agreeing on international standards to prevent sweatshop labor can be seen this way if not handled properly.

I agree that much of what is involved in starting a trade association is "just do it" but in this case I would also talk to a lawyer. If you're not sure where to find one with the proper expertise, contact me via e-mail (in my profile) and I will dig up the contact info of the attorney who I just saw give a presentation on all this stuff. He seemed like a good guy.
posted by alms at 10:11 PM on March 16, 2006